Feds Throw Obstacle at Oregon Health Exchange

December 28, 2011

A clearer picture is surfacing of a new health insurance marketplace intended to help individuals and small businesses shop for health coverage.

A preliminary business plan projects that more than 280,000 Oregonians will get health coverage through the Oregon Health Insurance Exchange by the end of 2015. The exchange would need between 100,000 and 120,000 people to break even, according to estimates.

The exchange is a public corporation created by lawmakers earlier this year to enable individuals and small businesses — which don’t have the expertise or buying power of large employers — to shop for health coverage and compare plans. Lawmakers drew up a broad outline for the exchange and directed experts to write an intricate business plan that could be approved when the Legislature meets in February.

Exchange director Howard “Rocky” King told lawmakers last week that a federal decision this month lobbed “a grenade” into the planning but he’ll still submit a business plan, the Statesman Journal reported.

The Obama administration announced Dec. 16 that it will give states broad leeway to pick the benefits offered under the 2010 health care overhaul. That’s good news for Oregon, King said, but it will create some short-term headache.

“It gives the state of Oregon the ability to look at what its citizens want and need and to frame choices for the Oregon marketplace, rather than let somebody in Washington, D.C., do it,” King told state legislators last week, responding to a question. “The bad news is that it’s going to be a difficult task.”

Now that states will have to determine their own initial benefits, King said, the process will involve broader policy questions to be decided in consultation with the governor, legislators, insurance companies, regulators and other state agencies.

States vary widely in what medical services are required to be covered through insurance plans, but many basic services are likely to be consistent throughout the states.

Under the framework for an Oregon exchange enacted earlier this year, a nine member board would decide which plans qualify under federal guidelines to be sold in the state’s electronic marketplace.

Lawmakers also required participating insurers to rate their plans — bronze, silver, gold or platinum — and to offer at least one “silver” and one “gold” plan.

Plans would not go on sale until October 2013 for coverage that is scheduled to start in January 2014.

Although the 2010 federal health care overhaul requires states to create a health-insurance exchange or have one imposed by the federal government, Oregon lawmakers have discussed the idea for years. House Health Care Committee co-chairman Jim Thompson, R-Dallas, said the concept was discussed as long ago as 2004, when he served a nine-month stint in the House by appointment.

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